A few years ago, I started my own consulting business and it was one of the most rewarding experiences I have ever had. Now don’t get it twisted, I FAILED. I failed worse than the 2017 NY Giants football team. For context, this team set the record for most losses in one season in the history of the team’s existence. So believe me when I tell you, …….I f@#$ed up. However, If it wasn’t for my failed business, I would have never developed the skills I needed for my career. So do yourself a favor and learn from my mistakes. Hopefully, your business does better than mine.
Mistake # 1 Failure to pivot
When I first started out, I assumed I had a good understanding of my customer niche. Wrong! I didn't take into consideration all the challenges and issues that some of my clients were facing. Startup founders and small business owners were my main type of customers. The issue I Ignored was the fact that a lot of them were trying to run lean and I didn't anticipate the challenges they were facing ahead of time. Many of them suffered the issue of trying to do everything themselves. Some wanted free advice, some couldn’t afford to pay me and resisted giving any equity, and the clients who could pay me didn’t always come back.
Looking back at it now, the best customers I had were medium-sized operations that already understood their needs as a business. Those were the customers who understood the value I provided to their business. As a consultant, I needed customers who were in demand for services and who could afford my rate. However, when 75% of your customer base can't afford your base rate, I did what most people would do. I lowered my rate. BUT! I lowered it too low and the only way I made any profit was to work crazy long hours. I forgot the basics I learned in my college economics class. Any form of a work-life balance I once had, went straight down the toilet. What I should have done was pivot and focus my efforts on creating different products and services that were more suitable for my customer base and didn't burn me out.
Moral of the story: Pay attention to how well your business model is operating and pivot if you need to. Your business model needs to be sustainable. It may look great on paper, but once you start implementing it, everything can go downhill fast. Pivot early if you need to. It could literally mean life or death for your business.
Mistake # 2 Doing everything on my own
Like many entrepreneurs, I was a one-man show and tried to control everything. I had a vision and I did not want to diverge from it in any form. I made the mistake of thinking that since I was well accomplished in other areas of my life that starting a business shouldn't be a huge challenge. Again.........I was wrong.
At this part of my story, you already know that I ended up in a death spiral of work because I foolishly lowered my prices to low. I was so busy working and trying to salvage the remains of my personal life; I let other aspects of my business suffer. The aspect that suffered the most was my marketing. There is an old saying in the freelance consulting world and it goes "Never forget about the famine while you are enjoying the feast." In a nutshell, it means don't stop looking for new clients because you have a few clients.
I got so wrapped up in the projects I was working on for my current clients that I ended doing almost nothing to attract new clients. Once the project was over, I had to start at ground zero and start rebuilding my pipeline of potential customers. The better solution would have been to hire someone to handle the aspects of the business I was too busy to do, but hindsight is always 20/20.
Moral of the story: Outsource, delegate, and automate. You can't do everything on your own. If you try to, you will just end up like another cautionary tale as I did. If you have a team, leverage their strengths and resources. You will be saving yourself a headache. If you are just running solo, then learn to outsource and hire a vendor if necessary. Today some vendors can automate a lot of the operational needs of a business. They can save you both time and money, but most of all they can help you be successful.
Hopefully, you learned a thing or two from reading about my mistakes. Now go out there and make some new mistakes of your own!
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